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In the sector of Information Technology, we see the Open Software movement, a movement in which people share knowledge, resources and products for free.

The Open Educational Resources movement strives to generate educational resources, which are shared for free (although often developed using subsidies of national governments and private institutions).

In the publishing sector, we see a discussion on Open Access; free access to scientific (subsidized) publication.

In industrial sectors, we see a discussion on Open Innovation (Chesbrough, 2006, de Wit and Meyer, 2014); the idea that most knowledge will be developed outside the firm. New knowledge, necessary for innovations, has to be bought, sold or shared. (Information) Technology increases the possibilities for innovation on a small scale. Sharing of knowledge and resources is a major force behind the MakersMovement, in which small inventors design, prototype and -eventually- distribute their innovative products or services (also see Anderson, 2012).

Wiley (2014) – in his discussion on Moocs – defines openness in education as the transition of ‘open entry’ (in the sense of no entry demands from the Open Universities) towards ‘open licenses’, as in Open Educational Resources (OER), towards a possible ‘open educational infrastructure’.

Open Universities over the world (generally) accept all kinds of students, independent of the level of former education. Yet, education in this case is not free; students have to pay fees, which can become a barrier despite the formal openness. So did a member of the Open University of the UK argue that it could be seen as a social obligation to set entry tests. Given that students have to pay certain fees, it would be unfair to let them make debts for a couple of years, after which the university concludes that they are not capable of finishing their study.Since the nineties of the last century, several organizations worked on the development and distribution of free educational objects. These objects were termed Open Educational Resources in 2001 by the Unesco (1st Global OER Forum in 2002). This openness is defined over five dimensions (the 5R activities, as defined by the Unesco (2012):

Retain – the right to make, own, and control copies of the work (e.g., download, duplicate, store, and manage)

Reuse – the right to use the work in a wide range of ways (e.g., in a class, in a study group, on a web site, in a video)

Revise – the right to adapt, adjust, modify, or alter the work itself (e.g., translate it into another language)

Remix – the right to combine the original or revised work with other open works to create something new (e.g., incorporate the work into a mash up)

Redistribute – the right to share copies of the original work, your revisions, or your remixes with others (e.g., give a copy of the work to someone else)

Another general model of openness is the 5-components model for open education (5COE) of Mulder and Janssen [2013, figure 2]. This model unbundles the different activities into three components on the supply side and two on the demand side.

On the supply side they distinguish:

Open educational resources (OER) 2. Open learning services (OLS): online and virtual activities which are available either free or for payment, including assessments, exams and communities; 3. Open teaching efforts (OTE): all supporting activities as teaching, ict-support and other roles in (distance) teaching; these activities will generally not be free.

On the demand side they describe the following two components:

Open to learners’ needs (OLN): open education should be free in the sense of time, space and tempo; however, it should also be affordable for everyone. 5. Open to employability & capabilities development (OEC): education should be open towards new and changing demands from society and the labour market, but also promote critical thinking, creativity and personal growth .

The unbundling of Janssen and Mulder (2013) had the aim to develop a potential earning model for HEI’s, combining paid activities with the supply of free resources. This was necessary because there was a feeling that the isolated development of open educational resources, as done by MIT (subsidized by the William and Flora Hewlett Foundation), or Saylor.org (offering whole courses, subsidized by Michael Saylor ( MicroStrategy Inc.)) were too much dependent on the goodwill of a person or foundation.

Others are building on Andersons 2009) Freemium model ). For example, the Free Software Academy, which offers free courses and paid tutoring within accredited programs. The Moocs developed in recent years often use a similar business model.

With respect to the openness of this model two remarks have to be made:

there is a major division between several providers of resources, whether objects or full courses. All are open in the sense that using them to learn or teach is free (costless and no entry barriers), Yet, some do apply all the Unesco R’ s, some only part (both participating under different Creative Commons Copyrights), some are not reusable or adjustable at all. Especially Moocs are static in the sense that they cannot be changed or adjusted to new usage, sometimes new usage is actively discouraged. Furthermore, Most Moocs are only open for a certain period (often the period the same course is given in the original university).

as shown by economic theory, obtaining money for products or services requires the possibility to exclude others from using the service or product. Unbundling to design a business model for open education means to draw a line between activities and products which are open (exchanged for free, but not necessarily costless) and activities which are closed (exclusively available for paying participants). Janssen and Mulder (2013) did use their model to show the possibilities of traditional and open universities to participate in the OER movement. Yet, it can also be used to explain the initial enthusiasm of xxx-investors to participate in the American Mooc-platforms. The expectation was that by offering additional activities, the platforms would generate profits. To guarantee the required exclusivity, participating HEI’s had to sign contracts which restricted their freedom in usage of the material placed with the platform. Data, but also third party contracting (in-company trainings ect.) became the prerogative of the platform.

Christensen et al. (2014) uses a similar approach to forecast a more disruptive development with respect to the (American) educational sector. Distance education, the competence based approach, the existence of high quality, accredited open educational materials offers commercial firms the opportunity to enter the educational sector, aiming at low cost segments and non-consumers (of existing education). According to them, it is only a matter of time before the last bastion of the traditional mixture of academic research and education, the accreditation organizations, will fall.

So unbundling education at an organizational level could result in unbundling at a sectorial or national level and a new division between open en exclusive forms of education.

Wiley (2014) moves openness even one level higher. He sees open education as an open education infrastructure. With this he means a “set of interconnected structural elements that provide the framework supporting education”.

He concentrates in this on competence-based education. Developing competence profiles and the accompanying programs, techniques and need is costly and complex. By offering open competence programs, more institutions can develop new experiments based on these programs, improve and change the programs, which will feed back in the education of the original developers. Such a process should improve quality and efficiency of CBE-programs and the educational infrastructure. The same applies to assessments. In a CBE-world, knowing the exams will not increase a student’s chances (a reason for secrecy in a the more traditional educational world) as the test are competence based, and will judge performance rather than reproduction. Again, opening up your assessments will improve them by increasing usage, localization and experimentation. Wiley (2014) adds open certification to his open educational structure as a logical step following the definition of competence oriented learning objectives, teaching and learning using open educational resources; being tested through open assessments and using open certificates to show for the acquired competences. Openness of this kind will increase the quality and efficiency of the national educational system.

There are two important distinctions between these approaches. First of all, we can make a distinction between free activities and free products. As Michael Saylor is quoted at the Saylor.org website: Education should be free. Yet, at the website, a lot of courses can be found, however if we define education as the combination of materials, teaching, assessments and feedback, it represents only part of the educational activities.

The same seems to apply to the open education of Wiley (2014). He writes about the exchange of CBE-profiles, open exchange of assessments and alike. However what will be done with these products is not discussed.

The second distinction touches this point. Mulder and Janssen (2013) distinguish between the supply and the demand side. The supply side of the educational system are the teachers and HEI’s offering education to students; competent employees to employers and engaged civilians to society; forming the demand side of the system.

Openness on the supply side seems to concentrate on educational resources, whether teaching materials, assignments or CBE-profiles. The aim of the resources is to support and improve teaching by making materials available, but also stimulating quality through discussion and improvement of existing materials.

Openness on the demand side is about the freedom to participate in education. This is about the removal of entrée barriers. These barriers can be formal (admission restrictions), financial (high fees, large additional costs) or otherwise. The OECD (2014) rapports on tuition fees . These range from non (eg. Austria, Greece, Finland) to € 1950 in the Netherlands. Outside of Europa, the average fees are higher: Canada (approx. 4,000 USD), UK and the USA (approx. 5,000 USD) .

Other barriers, however, may be even more important especially in later-in-life education, as the combination between education and work.

Open education is different from free education; yet in my opinion, openness should be about removing barriers for learners, not only on providing resources for teachers.

On first sight, the approaches of Prahalad (bottom of the pyramid) and Christensen (disruptive innovation) seem very similar. New firms offer products with less functionality at lower prices, making the products affordable for more customers, especially those with lower incomes.

It is even so that firms who aim for the bottom of the pyramid will be disruptive in their market in the sense that their new offerings will replace the old products and so the old firms.

However, at a more fundamental level both approaches differ substantially from each other. Prahalad tries to combine social responsibility, capitalism and social welfare in a sustainable way. By producing for the millions, a small profit rate can generate enough absolute profits for a sustainable development of the firm.

Christensen describes a situation in which small firms are able to offer a product of a lesser quality for a lower price to both existing and new customers. By offering less functionalities and a lower technological quality they attack the lower end of the market, where the profit rates for the existing firms is lowest. Yet, when the last of the high-cost high-price firms has left this segment, competition will drive the price towards its zero-profit level. This will induce the low-cost firms to innovate their products, adding quality and functionalities, and attacking the new bottom of the market. This process will be continuing until the top of the market has become the new bottom.

[For non-economists: Profits is often used in several ways; here Prahalad uses the word profits for the income of the firms; at the zero-profit level of Christensen, firms have a 'normal' level of income; so not to worry, no people starve because of this kind of competition]

I see the same fundamental difference in the approach to Open Education. People and institutes involved in the production, distribution and research of Open Educational Resources do this because they see a linkage between social responsibility, welfare and offering education towards people whose access is financially or otherwise restricted.

Business models for OER are conducted in line with the approach of Prahalad. Given the need for free education for the bottom of the pyramid, how can this be organized in a sustainable way? This concentrates not only on the kind of earning models, but especially on efficient ways of production and organization.

Other initiatives, as Moocs and the online offerings of for-profit educational institutes, have explicit earning models. For example, most Mooc-platforms have contracts which contain regulations about the usage of the courses in commercial settings, about the usage of learning data or about future income selling student data to prospecting employers. For-profit institutions see students as customers, stripping all academic overheads, making the student an offering which is inferior in the eyes of the traditional educational sector, but sufficient in the eyes of the potential student.

This could induce a disruptive development, in which the Moocs and for-profit institutions move upmarket; each time segmenting the market more by offering the lowest quality at the lowest price, adding to this with an increasing price until they replace the traditional institutions.

Problem is that once offerings move from the not-for-profit towards the for-profit sector, the price mechanism will not automatically take negative externalities into account. Political agencies which set the goals for not-for profit institutions often take into account other goals. In the case of educational institutions, not only the direct effect on the carrier of the students, but also on social welfare and the relationship between research, education and economic and social growth.

One actual effect can be seen: for-profit institutions which concentrate solely on education can offer educational programs at fees which are below the fees of traditional institutions. One of the reasons for this is the fact that they have lower cost as they have not to pay for the investment in new knowledge (research). Often they work with part-time teachers, who gather their knowledge elsewhere. By acting in this way, for-profit institutions forego both direct research costs and indirect coordination costs.

Assuming education has major positive external effects on general welfare. Most functions associated with these effects will be removed as part of the reduction in quality which is part of the disruptive tendency as described by Christensen and others. In this sense, disruption of education is one of the worse things which could happen to a creative competitive society.

Freedom’s just another word for nothin’ left to lose
Nothin’, I mean nothin’ hon’ if it ain’t free
Joplin Janis – Me And Bobby Mcgee

Do we have to expect that traditional education will disappear within the next three decennia as mainframe computers are replaced by handheld smartphones? Following Christensen and Horn (2013) Moocs will have this effect in time, with Moocs as disruptive innovation replacing brick-and-mortar universities.

However, in Christensen, Horn, Caldera and Soares, they give a more nuanced approach, based on the existence of (open) distance learning institutions, given the different problems of (USA-based) higher education (p. 2): stagnating graduation rates; financial difficulties, both by the educational institutions, by the students and on the different government levels, declining prestige in the field of education, notwithstanding a good reputation in research.

To follow their 2011-analyses, we will give a description of disruptive innovation, followed by the analyze why ODL will be a disruptive force, but also reasons why it will fail if some conditions are not met.

Funnily, Moocs do not have the characteristics Christensen et al (2011) see as essential for ODL to become a disruptive force. Given the attention given in the last year to the possible disruptive influence of Moocs, it is interesting to see what the conditions leading to disruption in the educational sector.

Disruptive innovation

Disruption does not mean ‘a radical breakthrough improvement’, but it is an innovation replacing an existing complicated high price-high profit offering with a low price- low profit alternative, which is generally less complicated and with less functionality. This alternative replaces the original offering at the lower end of the market, but also opens up new opportunities in making the product or service available to customers who formerly could not understand or afford this product/service.

For a number of reasons the existing firms are not able to provide a similar alternative, as this alternative cause them to lose the higher profit upper part of the market. According to Christensen et al., business models are designed to solve one specific ‘problem’ and make money via a particular profit formula (p. 20). In an existing market it makes more sense to increase quality, prices and profit rates by moving production capacity from the low-profit bottom of the market toward the more profitable upper part of the market. A conclusion which is not fully accepted in the business model literature (see for example Osterwalder and Pigneur (2010), who assume that one organization can house more business models).

Assuming the new entrants to be price fighters, their costs advantage will disappear when the last of the original firms leaves the market. However, then:

..disruptive companies must move up-market through sustaining innovation once their business model has been established in one of the outer circles in order to sustain profitability and organizational vitality. The reason: If they stop this up-market pursuit and compete only against equal-cost competitors, then they have no cost advantage. It is only if they carry their low-cost business model up-market that they can retain their cost advantage against competitors (p. 15).

So the disrupting firms will move towards the top-end of the market pushing out the old existing firms.

The only exemption to this destructive force is IBM, who decided to open a new business unit at arm’s length, after the introduction of personal computers. In time, the business unit replaced the original mainframe producer!

ODL as disruptive innovation

Question is if the conclusions from the research into disruptive innovations in the profit sector are valid in a not-for-profit sector as education. Their answer is yes, because:

Improved profitability tends to drive the decision making in for-profit circumstances. But in not-for-profit circumstances, the ambition to do more and have a bigger footprint—an ambition driven both by administrations and often alumni in the case of education—precipitates precisely the same behavior as profit maximization in the for-profit world. The companies on the sustaining trajectory, when faced with the choice of making better products that merit better profit margins vs. making lower-priced, simpler products that merit slimmer margins, invariably find it more attractive to build and offer more and better (p. 14).

So, what are the problems with the present business models of education?

Christensen et all. distinguish three kinds of business models, solutions shops, value adding processes and facilitated network-users. In the table below, these three types of business models are described. Problem is that most universities try to combine at least two of these business models, as can be seen in the fourth column.

Fee-for-service model: being compensated for their inputs, not the results, because the outcome depends on many other factors.

Most university faculty research is solution shop-like activity

Value-adding process businesses

Organizations with value-adding process business models, in which resources and processes are used to transform inputs into more complete outputs of higher value. Value is created by efficient processes and organization.

Income is based on the output of their work.

Teaching

Facilitated user networks

An enterprise in which the participants exchange things with each other.

Fee for membership or fee for use.

Thanks to the Internet, many university activities that were formerly conducted as solution shop and value-adding process businesses are evolving into facilitated networks among students and faculty, such as hosted discussion forums.

Because of the combination of different business models within the same organization, there will be costs of complexity: additional overhead costs and inefficiency in the organization of the different activities (education, research and consultancy).

So in this time of financial crisis and a reorientation of students, the reaction of existing educational institutions will be to increase their efforts in the existing activities: putting more effort in excellent research, aiming for the outstanding students and academic standards.

In the view of Christensen et al. (2011) this ignores the fact that the educational customers are changing: was the majority of the students in the 18 – 24 years old group, for whom degree less important than ‘becoming of age’, nowadays a large part of the learners is older and factors like costs, competences and timing become more important than degrees and socializing.

They see online education as the technological driving force which makes it possible for large amounts of people to get this ‘just-in-time’ education, based on competences at low costs:

online learning offers a natural medium to move forward focusing on competency based measures around what one is actually able to do, about which employers and society at large are actually concerned (p. 45).

One of the major barriers for moving towards a more just-in-time education based on competences is the fact that accrediting agencies reinforce the existing situation, by stressing the importance of research and keeping outsiders that operate differently out of the “club” (p. 46).

As existing organizations will not be able to move down the market; providing less services, but more value at lower cost, Christensen et al. (2011) assume that government agencies and politicians have to ‘open up’ the sector, giving four advices to regulators in the educational sector.

Some critical remarks

A lot of the examples in the 2011-rapport are of for-profit institutions, concentrating on online education or of existing institutions which have transferred their online education towards another ‘business unit’ outside the university.

Lawton and Katsomitros wrote about the failures of ODL (for-profit) organizations, listing the following institutions:

2001

NYUonline (part of New York University)UMUConline (University of Maryland University College)Virtual Temple (Temple University)

2003

Fathom (a high-profile and for-profit elearning portal launched in 2000 and led by Columbia, with Chicago, Michigan, LSE, Cambridge University Press, the American Film Institute, and other partners including the New York Public Library, British Library and a number of museums in London.)

2004

UK’s e-university experiment (UKeU)

2006

AllLearn, a not-for-profit online collaborative venture of Yale, Oxford, and Stanford, which started in 2001, and which more closely resembled the current MOOCs.

So not every alternative educational institute has become a success. Furthermore, although not every academic researcher is a good teacher, every good teacher is capable of translating scientific research into educational materials.

As I have argued elsewhere, a lot of the commercial educational institutes are built around teaching professors, with a research position in publicly funded institutions. In this way, they can offer education at a cheaper rate as they do not have the investments in research and education of the teaching staff. In this sense Christensen et al. are right in the sense that there are less overhead and complexity costs, as these costs fall upon other institutions.

It is, however, a good approach to determine what society and individual learners really demand from educational institutes. It is a reminder that (academic) education is the translation of new knowledge into learning and competences. Accreditation should take this aspect of education more into account and put lesser emphasis on research activities of educational institutions.

Yet, in my experiences, working at the faculty of Management Sciences of the Open University of the Netherlands, most of my adult students are not only interested in the content of the courses, but also in the certificates of the individual course, to show their employers that they have acquired the essential knowledge. A large group is also interested in the Msc-degree. After some years, in which working experiences determines their career, they encounter some kind of ‘glass ceiling’ as they lack a formal degree.

The message of Christensen et al. is clear: online distance education should be concentrated on education, reducing overhead- and complexity cost. Affordable education, driven by the demand of the learners and society, will disrupt the educational sector; but only when policymakers will create the conditions for these initiatives to be sustainable.

In this shorter piece, I want to express my support with Audrey Watters. In het blog [Expletive Deleted] Ed-tech #Edinnovation, she reacts to what she describes as Wikiality or truth by consensus rather than by fact.

Watters quotes Khan, who gives a description in which noting changes between 1892 and 2010: “static to the present day”.

Having written on the pre-academic educational systems in the Netherlands, Belgium and Germany I understand why colleagues in this field will sigh and wish it to be true. I don’t know how education changed (or not) outside Europe, but here we have had a movement from knowledge towards competences and back. The changes in pedagogical techniques were accompanied by almost yearly system changes. A report of the Dutch Tweede Kamer concluded in 2008 that much risks were taken.

Yet, as we have seen often enough, history is (re)written by the victors. I agree with Watters that it is shamefully that pioneers like Wiley, Downes and Siemens are not given the credits they earn. But beyond the earning of Noble prices for education, I’m worried about the future. The original designers of Moocs and OER are interested in the distribution of free materials, in offering new opportunities to learners. The modern suppliers of Moocs, as Khan, Koller and Ng or Thun seem to have different models in mind. Being externally financed start-ups, they will have to deliver a return on investment in time. Question is if the winner will take all?

Lenin with Trotsky

Lenin without Trotsky: rewritten history

Part of the discussion in Wikipedia – Moocs:

Early MOOCs [edit]

The opening paragraph of this section makes the claim that “David Wiley taught what ostensibly was the first MOOC, or proto-MOOC, at Utah State University in August 2007.” There is no reference for this, and the description is simply of a free course that was open to people around the world. This, by itself, does not make it a MOOC. And, if that description is enough for it to be taken as a MOOC, then it certainly does not make it the first. (Using a meaningless concept such as “proto-MOOC” could apply to any form of web-based instruction.) For the statement to be taken seriously, far more independent information and references need to be supplied, otherwise it smacks of someone retrospectively laying claim to something, and should be removed. Kmasters0 (talk) 17:07, 6 November 2012 (UTC)

Removal of Paragraph [edit]

It has been three weeks since I suggested that this paragraph be removed, and there have been no arguments against it. I have removed it, but have copied here, so that, if there is a valid counter-argument (see points above), it can be restored:

David Wiley taught what ostensibly was the first MOOC, or proto-MOOC, at Utah State University in August 2007. This was a graduate course in open education that was opened to participation by anyone around the world. What would otherwise have been a class of only five graduate students became a group of over 50 people in eight countries.

Kmasters0 (talk) 12:27, 27 November 2012 (UTC)

I suggest in the future, when questioning content, you also:

put a {{Cn-span|text=}} around the content in question.

make a good-faith effort to contact the editor(s) who added it, and any who made substantial changes to it. (You didn’t mention doing this above.)

refrain from making uncited comments like “, otherwise it smacks of someone retrospectively laying claim to something, and should be removed”. It takes away from the other points you made, creates bad will with other editors, and smacks of disdain for other editors.

Yes, you’re right – I apologise. I really meant to note that, as it stood without a reference, it could look like this claim, and would be open to accusations of that; I wasn’t trying to say that was the case, but I can see how it could be read that way. Sorry, no disrespect intended. Kmasters0 (talk) 10:11, 28 November 2012 (UTC)

The reason the Wiley course was in the article was that it was referenced as an influence by both George Siemens and myself in our creation of the first MOOC.For example, I cite it in ‘The MOOC Guide’ which a reference of early MOOCs – see https://sites.google.com/site/themoocguide/ I would recommend reinserting it.

Time was too short to write a blog last week. To the why I will return later in this blog.

Sometimes things take some time before you make certain combinations. A few weeks ago I saw a documentary over the process against the people of the Pirate Bay in Sweden: the Pirate Bay away from key board.

The last week I was working on a paper, with a colleague of mine, concerning the effects of Moocs on Higher Education: are they disruptive or not? And suddenly, I am thinking about this paradox between Torrents and Moocs.

People invest in making things, physical or virtual objects. Growth theory tells us that property rights are very important for innovations. Given that

most inventions never will become more than a nice idea in the laboratory and

that between the state of creativity and a commercially interesting innovation the organizations has to spend a lot of money,

it is clear that organizations have to earn a lot of money to pay back for all those investments.

So -according to the theory- this earn back period depends on the time an organization can protect its product or service from becoming replaced by cheaper copy cats. Hence the importance of property rights.

This paradigm is adjusted in recent years, both in practice as in theory. Open innovation still builds on solid property rights but sees a lot of wasting resources because of the closed approach to research and innovation. In practice there are firms who decide against the long period of patenting their inventions, stating that the patenting process in itself increases the possibilities of competing copies and results in losing valuable marketing time (move fast before they catch up).

Yet, the entertainment sector still bases itself on the old growth paradigm. They point to the investments of artist and producers to develop books, music and movies; things that can be digitalized and copies. An interesting exception are paintings. There is a whole industry offering Van Gogh’s Sunflowers and nobody is treating to shut down my printer if I make a color print of a picture of the Rijkswacht of Rembrandt.

However, exchange of digital copies of other artistic products will result in a world where no movies are made, no books will be written and no original music will be composed.

There is something strange with respect to this attitude. When I buy a book or a cd, all rights are mine; I can resell them, give them away or donate them for a good cause. There are even organizations who buy books and leave them in trains and other public places. I can make copies for “home-use” and share those with friends. Sharing in this sense is seen as something good and socially desirable behavior. However, when I buy an electronic book, I can only resell it if I read it online at Amozone.com who put it in a vault. When I resell it, it is not the book I sell, but the combination of this vault. I have the feeling that when I buy something digitalized, I never become the owner but will always rent it in some way. Let alone that people should share on a larger scale, using P2P networks (Pirate Bay) or hosting sites (as Megaupload). The movie about the process against the Pirate Bay shows that the vision of the South Park creators is more than fiction.

So sharing with a small group of people is good, but sharing with a lot of people is bad!! At least that is the message as I read it in the behavior of society with respect to internet organizations who facilitate mega-sharing.

Yet, in the past year, I read nothing but good words about teachers, institutions and foundations who facilitate the free mass sharing of knowledge and education. Of course there are discussions on the motives and the pedagogical models, c- versus x-, definitions of free, gratis versus available and so on. Yet there is a consensus to the fact that free education perhaps not will change higher education, but at least will raise the quality with decreasing costs. The newest hype being Moocs because massive is good adn efficient. So in education Sharing is good, Big Sharing is better!

Why does society feels that big sharing in some ways is bad, whereas it is desirable in other situations? Could it be that developing (good) education does not require investments; perhaps the fact that Moocs build on existing courses and that the ‘putting online’ does require such small sums that these small sums disappear in the larger budgets of universities? Yet 55 % of the Mooc-teaching professors indicate that these activities significantly competes with other activities.

Another explanation can be that the suppliers of the Moocs are different from the owners of education; as I described elsewhere the motives of individuals to participate in OER can be different from those of the institutions involved. So a professor can offer a Mooc because he thinks that his materials are not worth anything elsewhere, or for reputational reasons; organizations often participate because of the additional subsidies, marketing reasons or as part of their corporate governance.

Partly this is recognizable, offering a successful Mooc is good for your professional reputation. Yet, most Moocs contain specially for the Mooc developed materials, no rerun of old presentations and recorded colleges. The participating institutions put a lot of effort in the presentation of the Moocs, not only because of marketing reasons. There are a lot of ideas of potential future business models including providing additional services, selling programs for in company trainings and selling the information about the Mooc-participants. So, the Mooc institutions resemble modern day pop groups who offer (part of) their songs for free at the internet because they decided that their earning potentials are in other areas as life performances or fan goods.

In the same sense, publications in the form of double blind peer reviewed articles, published in closed journals are seen as of a greater academic value than blogs, columns or contributions to free journals. Also, in this sense free is a disqualification, synonym to bad quality. Perhaps scientific publications have to undergo a disruptive shock, just like education.

At this moment, all kinds of enterprises experiment with the change of “Product Dominant Logic” towards Service Dominant Logic”. Value creation is seen in the usage of a product, which implies that the interaction between supplier and consumer becomes more important. We don’t sell simple products anymore, but the product is part of a consumer-experience and the firm accommodates this experience. Products become services and customers co-creators, interaction becoming a major competitive force.

In education, however, we see an opposite movement. Distance learning, whether open or not, involves the translation of the didactical interaction, the presentation of the content and the experiences of the teacher into an electronic product, which could be uses independent of the individuals who made the online course. Again, because of the required quality and completeness of the course materials, a good online distance course will be much more expensive to develop than a face-to-face course. The quality and completeness are requirements which follow from the fact that the student should be allowed to study most of this material independently from tutors or peers.

By packaging the teacher into an electronic self-sufficient educational product, education moves from a service orientated sector towards a product orientated sector. In a sense it is showing a shift seen before in the performing arts. Baumol showed that labor productivity did not rise for a long time in performing arts; a performance of King Lear did require a standard amount of actors and the amount of spectators was constrained by the physical possibilities (space and time); leaving the ration spectators/actors roughly constant. However, through movies, television and –later- internet made it possible that the same performance was seen by millions of people, over and over again. So this altered the ratio spectators/actors largely, reducing the costs per spectator to almost nil.

The same applies for ODL: whereas production costs are above the development of face-to-face education, once the product is available, the delivery costs depend largely on the amount of students interested in the course. So if the course becomes Massive in usage, the delivery costs will go towards zero, justifying a free and open supply of online courses. In this sense, ODL is the answer to stagnating marginal labor costs in education and the logical way to increase total factor productivity through capital intensive innovations.

The declining marginal costs do not solve the problem of covering the initial cost of development. At this moment there are three models developed to cover these costs:

Institutions bear the costs themselves for different reasons: for example marketing motives, the universities as MIT and the OU-UK who were frontrunners in OER reported on the rise in new students; others invest in potential future earnings by selling the program to third parties.

Institutions and the participating individuals use materials which are developed in a different context(regular programs) for which is paid by students and the government thereby reducing the investment in ODL or Mooc.

Several governments and private foundations funded initiatives in the OER-movement; for example the Hewitt foundation, the Gates foundation and at present the Obama administration.

Of course, institutions do combine the three sources of funding to reach an optimal solution. The shift from education as interaction towards education as a product does not only provide the possibilities for a commercialization of education, this shift is expected to generate new sources of income, as described by different authors [ 1, 2].

In line with the Bottom of the pyramid –approach of Prahalad and the Blue-Red Ocean approach Kim and Mauborgne Moocs are the ultimate version of this development: strip your product of every unnecessary feature, leaving the bare supply which meets the demands of the customer. The decline in costs (and price) will make the product widely available, reaching customer segments comparable products will not.

This commoditization of products results in a downward spiral, were competition brings down prices and quality in a shark infested ocean, coloring the water red as only “the strongest survive”. Yet, several thinkers have suggested a way out of this situation. By moving from the commodity towards an experience, seeing a service instead of a product, firms can add unique features to their product offerings.

It is interesting to notice that what took the private sectors decennia to develop, is adapted by the educational sector within two years. Fred Mulder, the Unesco-chair on open educational resources, proposed a system in which the content was separated from other educational features as tutoring, assessment and certificates; describing a kind of Mooc before it really existed, but also foreseeing that independent sustainability requires additional sources of income. Thomas Friedman implicitly describes the flipped class room:

Therefore, we have to get beyond the current system of information and delivery — the professorial “sage on the stage” and students taking notes, followed by a superficial assessment, to one in which students are asked and empowered to master more basic material online at their own pace, and the classroom becomes a place where the application of that knowledge can be honed through lab experiments and discussions with the professor. There seemed to be a strong consensus that this “blended model” combining online lectures with a teacher-led classroom experience was the ideal.

In these approaches Moocs become a kind of electronic text book, used by others in their education. It will become a matter of time for the suppliers of the Moocs to ask a contribution of either the students or the institutions which make use of their materials. Yet, if this is the only contribution of Moocs to education, this is hardly to be called disruptive.

In several publications, we can see that Coursera, edX and Udacity are thinking about alternative earning models. These models all involve some kind of service to accompany the electronic lessons within the Mooc. So in this sense, Moocs are no disruptive innovation, nor a treat to traditional education. However, Moocs can be a change agent in the sense that they facilitate educational innovations as flipping the classroom, integrating learning and working or stimulating quality (why sit through a boring class when you can take the content from a first degree university or teacher).

Also do Moocs open up education for people who otherwise would not be in a position to attend classes. This will, however, depend on two factors:

The attitude of employers to free online courses; will they have a civil effect or will employers still hold onto official degrees?

Openness in Moocs should be redefined not only in terms of barriers of entry, but also in the availability of the course over the year.

Within two years, Moocs become full circle. From a publicly founded service related activity (education) towards to a free product orientated electronic course, a commodity; towards a privately funded experience by adding exclusive services to the free commodity.

Van der Bosch poses an interesting question as he states that Moocs are an interesting development, but as he says that Moocs are the wrong revolution. Bonnie Stewart writes about the supposedly disruptive character of (x) MOOCS, pointing to the many publications using this term. She sees a trend in the power relations to shift, however preserving and consolidating the power relations of the traditional universities. xMOOCs are, in her view, just an opening of new markets based on the reputation and brand of the elite universities. Rolin Moe in Reviewing Christensen’s Disruptive Technologies (Harvard Business Review, 1995) in MOOC Terms gives an historical interpretation of Christensen’s original definition of disruptive innovation, using it to analyse xMoocs.

Thrift in de Chronicle is even more cynical, listing four main reasons why MOOCS are called a disruptive innovation and became a hype over the past months: 1. Moocs do appeal to economic elites, which see opportunities for profit in an economic environment where pretty well everyone is chasing limited opportunities for high returns. 2. because it taps into a vein of middle-class anger over tuition costs (a subject also mentioned by van der Bosch). 3. Moocs could reduce costs of higher education for governments, providing an attractive excuse to reduce spending. 4. because all that said, as higher-education systems continue to grow in scale, it makes sense to look at ways of teaching more people more efficiently, and MOOCs may well be a part of the answer.

Concluding that, no elite universities will be caught up in a more general industrialization of higher education

Meanwhile, edX announced the new members in February. In this announcement, they described their selves as “the not for profit online learning enterprise [..] building an open source educational platform and a network of the world’s top universities to improve education both online and on campus while conducting research on how students learn”.

Promising: “Courses offered by institutions on the edX platform provide the same rigor as on-campus classes but are designed to take advantage of the unique features and benefits of online learning environments, including game-like experiences, instant feedback and cutting-edge virtual laboratories”.

However, the Chronicle poses the question How can a non-profit organization that gives away courses bring in enough revenue to at least cover its costs? Agarwal (president of edX) states that edX is non-profit, but self sustained. EdX expects income from several sources. Firstly, there is an agreement that “self-service” courses will be offered through edX without any further help, it pays a fixed amount of the income generated by the course to edX ($50.000 for a new course, $10.000 for recurring ones). Next, institutions can use edX as a consultant and design partner, paying for each course developed within this model. Furthermore, edX has a deal with a network of testing centres and has plans to license the courses to other universities, both potential sources of income.

Another interesting aspect is that Koller is quoted stressing that Cousera offers to share a larger part of the profits with the university that provides the course. It seems that competition between the MOOC-platforms has started?

napkin sketch by Clayton Christensen for Wired Opinion

So there are several positions taken with respect to the way we should look towards Moocs. Of course it is interesting to know the opinion of the person who labelled Disruptive Innovations. Christensen and Horn asked the question: Beyond the Buzz, Where Are MOOCs Really Going?

Their answer is simple: Yes.

For this answer, they have three reasons. Firstly, Moocs are serving non-consumers. Although Moocs are limited in the services they provide compared to traditional colleges, they offer free and accessible education to a broader audience, who can not afford the traditional offering. However, this is a characteristic of ODL in its broadest sense as can be read in the rapports of the UNESCO. China, Russia, Brazil and Turkey all offer some kind of Open Educational Resources with the intention of making education available in places where are no institutes for higher education and for people who are not able to participate in the traditional HEI’s. Secondly, as they state: disruptive innovations improve over time to march upmarket. This is also given as a reason why Moocs have become popular in recent months, using the augmented possibilities to increase quality. An observation which will not be shared by everyone commenting on Moocs. Lastly, Moocs redefine quality in the industry. As Christensen and Horn state: in the future, courses might be offered based on employer demand, not faculty research interests. MOOCs are already evolving in some ways away from traditional educational constraints: Udacity’s courses, for example, have shifted from a time-controlled to a more competency-based learning model that takes advantage of the online medium.

Will Moocs be disruptive in the sense that they will change traditional education?

Their specific form, to which I will return in a later blog, makes it possible for a new segment of “customers” to participate in education. It becomes more easy to sell “education” as a product to firms, incorporating it in their corporate universities. Just as the introduction of the film, the movies, made the stage performance available for whole new audiences, winning in efficiency as one performance could be seen by millions but (perhaps) losing in other features as effectiveness (the impact of the players on the spectators) or artistic aspects. Moocs facilitate the mass-consumption of education, but not the mass customization as predicted by Christensen and Horn. For that they are to inflexible. Furthermore, ODL and Moocs can facilitate other “revolutions” in education as flipping the classroom; transferring simple readings and task making to the e-domain, whereas the class room will be used for discussion and group work.

Predicting the future is not something I like to do, but my experiences with scenario techniques make me very doubtful if these kind of uses of Moocs will be applied soon. Drawing a line representing the use of Moocs as a change agent in traditional HEI’s versus a line of the supply of relevant Moocs by other HEI’s provides an optimistic quadrant in which Moocs will be offered and used to change the traditional educational systems against a realistic quadrant in which Moocs are offered by good willing individuals, used by individuals who have no other choice!

“Until now, this market has been dominated by companies based in the U.S., but with 18 U.K. partners, we are determined to provide the smartest and most engaging online learning experiences and revolutionize conventional models of education”

and twittered: British #MOOC provider expands and eyes India market.

David Kernohan replied to the InsideHigerEd-tweet and my retweet with the text above.

As English is a second language to me, I first consulted some dictionaries for the meaning of market (Webster, Cambridge, Oxford). There is some consensus that it can be different things. Either a real or abstract place where people trade goods or services, or the demand for something. As a verb, it can be understood as marketing or shopping.

Taking the quote above, I would say that the CEO of Futurelearn indeed sees the learning and education as something for which is a demand, so Moocs should form a supply meeting this demand. If money will change hands directly is to be seen but that each educational offer has a financial aspect is certain.

Although I don’t think that I have to defend the CEO of Futurelearn; I found several reactions interesting in the sense that it seems to be “not done” to question the effect of Moocs (also see Cathy Davidson). In a discussion last week, every question with respect to the learning effect, the high dropout rate, the high level of lurkers; not participating in discussions, etcetera (MOOCs and the AI-Stanford like Courses: Two Successful and Distinct Course Formats for Massive Open Online Courses) were countered with the argument that Moocs are free, even when people do not participate, do not finish a course or do not learn anything from the Mooc, who cares?

MOOC (Photo credit: Sarah_G)

Well, we should for different reasons. Firstly, if Moocs are ineffective in delivering education, the effort of teachers, multimedia specialists and administrators had been better directed in another way, providing other kinds of courses. Even if courses are offered for free, producing them involve costs and labour hours which could be put to another use.

Secondly, I think Moocs offer a very interesting alternative to Open Educational Resources and the possibility to develop sustainable (business) models in which the free provision of valuable education worldwide will be possible.

On the input side, Moocs use courses which are developed for brick-and-mortar universities. Most courses are used for the on-campus students during the regular semesters. An on-line translation of these courses is made publicly and free available. So the additional costs of the online course are only the added costs of the recording and changes made to make the course more independent of the face-to-face situation. Of course, as I have argued earlier, a full distance course would be more labour intensive and so more expensive than the online copy of a regular course. The usage of Moocs to increase the public of the original course could be seen as a more efficient use of the public subsidies which were used to develop and deliver the original course.

In several publications, earning models for Moocs are suggested and seem to be translated into contracts. Among those are data-mining using the email addresses of interested students, marketing of the offering institute, advertisement space or selling the course as an in-company training. The Moocs also offer opportunities for other institutions. Using the Moocs, they can offer degrees within their own institution or in cooperation with the original provider of the Mooc.

So both on the input as on the output side of the educational system, Moocs can help the educational system to become more effective. However, an important assumption by this is that both the original course as the online massive translation of this course are worthwhile to begin with.

If the dropout rate is high because the content or the didactical form of the course dishearten people to accomplish the course, disappointing and discourage people to participate in distance higher education later on:

The efficiency on the input side is gone;

The effect on the total level of education of a country is lost;

No one would be prepared to pay for a commercial usage of the Mooc.

To conclude:

If there is a formal market or not; money is used in the production and exploitation of Moocs;

The usage of scares resources requires that these are invested in the most effective way, whether this effect is calculated in monetary terms, social benefits or civil rights.

In 2012 the youngest branch from the online distance learning family (ODL) generated much attention. Moocs distinguish themselves from open educational resources in several ways. Moocs are full courses aimed at learners, whereas resources are often reusable parts, aimed at teachers. Openness ranges from free to participate to free to use. It is their business model, that makes them interesting. Most (M)oocs are regular courses, for which development is paid for by normal university funds.

They are recorded in some way and delivered free through some kind of collaborative platform. Some platforms discuss generating additional incomes by licensing other institutions to offer degrees based on the courses or integrating the courses in in-company training programs. Of course there are also critiques on Moocs, ranging from McDonalisation to instructor led. Willem van Valkenburg just recently wrote: “As you can see is that most of the platforms are created by a US for-profit company. So I encourage initiative from outside the US, especially the ones that are really open”. In October 2012, U

Another of the latest trends is flipping the classroom: transferring your courses in distance learning, using the class room time for interaction instead of lecturing. Wilfred Rubens has written a number of blogs on this subject, listing among others the warning that wrong choices with respect to the distance learning can result in less educational results. During the Dutch Education Days he organized a session where he did not give a presentation. The participants had to prepare themselves beforehand, using the information sources and tasks that Rubens had published on his website. The session was completely dedicated to interaction. Next step, following the Guardian, is the flipped academy.nX has started in Spain and the British Open University announced to start their own Mooc platform some days ago. However, why van Valkenburg asks for new initiatives and if the new platforms will be different from the American platforms is not clear.

Quote 1: “Alex Bruton, associate professor in innovation and entrepreneurship at Mount Royal University in Canada, thinks so. The ‘flipped academic’, as he sees it, is an academic who informs first and publishes later, seeking usefulness as well as truth in their research and striving to publish only after having had an impact on students and society”.

Quote 2: “An academic’s success should not be measured by the number of research papers they produce, but in how they communicate their work to a wider audience, suggests Sarah Hewitt, assistant professor in the department of biology at Mount Royal University”.

This concept combines the Open Access approach with the critique on managerialism in university (Christine Teelken, see my last blog). However, working at the Open University of the Netherlands, we already flipped the classes over the last 15 year. Comparing two situations, I find that a lot of the success depends on the attitude of the students.

For a strategy course, we organize meetings with our regular students and with people only taking the strategy course as a special subject. The regular students are used to distance learning, come prepared to the meeting and most of them are interested in discussing their companies strategic decisions using the distance materials.

Although the “commercial” groups differ, a lot of the time the learners just want to pass the exam, wanting a summary of the materials. In such cases, it is hard to motivate the students and the tutor to get into a group discussion.

Lastly, following several authors, the social contract is broken because of the financial crisis. At least what they mean is that implicit relationship that more education increases your chance of more interesting work or a higher income does not exist anymore. However, the social contact as described by Rousseau, Locke, Grotius and others can be best be illustrated by the story of the stag hunt. Hunters have the choice to cooperate and hunt a stag, feeding the tribe, or individually hunt a hare, feeding their selves and their family.

In terms of the political economy, hare hunting represents capitalism, stating that my hare is bigger than yours; without ever hunting a stag. State communism is stag hunting, with the leader taking home the stag, leaving the tribe hungry. Question is if there is a third way?

In economics, the third way is represented by the Keynesian approach. Simply said, Keynes’ theory states that in good times a government has to save, so it can run a deficit in bad times. Tinbergen added to this that the best way to spend your money is to use one instrument to achieve one goal (first best solution). Theil amended this view in the way that the government often has less instruments than goals, so choices have to be made and not every solution is optimal (second best solution). In political sciences, it is accepted that, as Churchill said: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” (from a House of Commons speech on Nov. 11, 1947)

The social contract as an alternative for cold capitalism or dictatorial state communism, can be described as Social Democracy; combining Theil-Keynesian economic policy with the imperfect participation of one-man-one-vote (not excluding women of course). Especially for a good functioning of social democracy, it is important that people understand the choices made. Not every target can be fully realized, there has to be a tradeoff between objectives; both in economic and in social politics. This understanding demands a good educational system; participation and social cohesion depend on understanding.

In this sense, I think education is a stag. Society is responsible for the functioning of the educational system as a whole. Business models and management theories have an important function within the sector: efficiency is important especially in a time where money is scarce.

Especially in ODL, Moocs or OER, competition will lead to reproduction of similar courses. Perhaps some courses will be better; nicer or cheaper, so in time these courses will drive out the other courses. But in the meantime resources will be wasted which will damage both the reputation and the level of education whereas cooperation and coordination could increase the efficiency and by that the level of education, the availability of good materials and give teachers over the world instruments to improve their courses sharing the resources.

I am curious which of the developments will prevail; will the introduction of Moocs lead to (international) competition or to a more open educational environment? Will we be able to flip academia? Or will the new rules of Open Access lead to more inequality between those who can pay and those who can not?

Lastly, will the economic crisis lead to a political crisis; breaking up the social contract or will people and governments work together to reinvent the third way of social democracy, accepting the imperfect workings and Theil’s second best solutions.

Suddenly a social contract appears in the blogs I am reading. In “The Perfect Storm for Universities“, Popenici writes about the fact that more education does not necessary means a higher income or more change of a steady job. Bonnie Stewart states that the social contract can no longer fulfill its promises. Adding “Of course” to this sentence. Prinsloo lists the assumptions and links between Bildung, graduation and employment which are replaced by other forms of curriculum development, assessment and accreditation, as one of the major changes of 2012.

Respecting the differences between the blogs, they all blame education for the break down of this relationship. Either the appearance of Moocs and the Internet flow of information (Stewart, Prinsloo) or the student loans, a business attitude of university administration and faculty and the arrogance of universities in general (Popenici). Or taking a quote of Christine Teelken: It seems that universities are no longer viewed as ivory towers of intellectual pursuits and truthful thoughts, but rather as enterprises driven by arrogant individuals out or capture as much money and influence as possible.

However, a contract is a two-sided agreement, depending on certain conditions. This social contract states that if the individual does his best to get explicit grades and diploma’ s, society will take care of his or her employment. One of the conditions attacked is the state of education, which is either bad or treated by ODL‘s as Moocs. Neither of them talks about the other conditions. In Europe as in the USA, there are only a few jobs available. Because of the credit- and the euro-crisis, because of the decline in competitiveness, the social contract has been broken, not necessary because of the rise in alternative sources of information and education.

If online distance learning (ODL) is not the source of the problem, perhaps they can be (part of) the solution? ODL’s, whether open educational resources aimed at teachers (reusable, remix and redistribution) or open online courses aimed at learners (and massive if successful).

In a world where income and employment decline, the access of education is limited as the example of Greece shows. Free resources and courses could help to overcome the scarcity of materials and teachers.

As one of the reasons to be involved in the production of open educational resources, the Unesco reports on the Russian Federation and China state the availability of good quality materials in distance parts of the countries, in Brazil availability over income groups is also mentioned.

Another reason for introducing ODL in a large scale in traditional education is given by Stephan Ruth. Combining different models of ODL (Mooc’s, course redesign using e-learning, virtual campus, the $10,000 degree), he concludes that e-learning can greatly decrease the costs of education. He therefore comes to a combination of models, the Export Import Model, in which the excellent universities offer open online courses and resources. Because of the restricted supply, each ODL becomes a Mooc, used by not-so excellent universities, who organize the tutoring, the discussions and exams. The not-so excellent universities pay the excellent universities a fee for the use of the materials and get an income from the students who want to get tutored, take exams and so forth.

Having some experience in developing distance education myself, I think the cost reduction is strongly depending on the amount of students. Designing and making good distance education is much more expensive than designing and giving face-to-face education. When the initial development costs are spread over more students, there will be a point after which ODL is cheaper than f2f education. However, as tutoring can not be up-scaled indefinitely, there can be an upper bending point after which the efficiency of tutoring declines and the cost reduction declines too.

Another drawback of Ruth’s approach is the division between developing and exploiting institutes, between high paying students studying on site at the excellent universities and other students studying at the not-so excellent universities. What such at division means for the social contract even when the economical crisis disappears, is not clear to me.

Mondon and Hoffstaeder give yet another view on such a division, however along the line of humanities versus natural sciences. They are afraid that online learning is in favour of hard sciences, which in their view can bet assessed by single answer questions, whereas humanities require other skills as good essay writing.

Secondly, they are afraid that students will not study humanities as the job prospects are limited; thirdly humanities are more dependent on student numbers and government grants as they find it harder to find private partners for funding their research.

Partly these worries are mirrored by the research of Teelken and the translation of this by Prinsloo, Stewart and Popenici, especially the dependency of education on market forces and efficiency, as stressed by Ruth. However, ODL, OER and Mooc’s are not the monsters depicted by Mondon and Hoffstaeder. Assessing essays, papers and other kinds of assessments are available and under construction. The fact that students in the present situation take their future job opportunities in account by choosing a curriculum is not strange given the economic situation, whereas the relation between ODL and research funding is a strange one.

When the Hobbit, Bilbo Baggins, closes his home to go There and Back Again, he didn’t realize what lay ahead of him. Also it is the question if modern multimedia techniques can beat 35 years of imagination. Will free ODL’s change the world is an open question but hopefully there will be a Back Again.